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Foreign firms coin over R550m from SA's loss-making e-tolls

Two overseas companies have earned more than R550-million for providing e-tags to and printing and distributing invoices for South Africa’s loss-making e-toll system.

Transport Minister Joe Maswanganyi responded to a parliamentary question posed by the Democratic Alliance’s (DA) Chris Hunsinger about the breakdown of payments to third parties for e-toll collection and e-tag provision.

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Maswanganyi said Kapsch TrafficCom AB from Sweden and Q-Free ASA from Norway have been contracted for e-tag provision and maintenance.

Kapsch TrafficCom (a subsidiary of Austrian company Kapsch) received R167.2-million (exclusive of VAT), while Q-Free got R58.3-million (exclusive of VAT) for providing e-tags.

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The amounts reflect the total that Sanral paid for e-tags upon delivery since the inception of the e-toll system in December 2013.

Sanral told Fin24 that the amounts paid to the two companies are exclusive of value-added tax (VAT), as it is claimed back by the companies.

In 2010, Kapsch, with Matemeku Investments, a level 2 broad-based BEE company that was invested in TMT Services and Supplies, won a R6.2-billion tender from roads agency Sanral for the design and operation of the e-toll system in Gauteng. Together they made up the e-tolls collections company Electronic Toll Collections (ETC).

Matemeku subsequently divested from ETC, which meant that Kapsch gained full control of the collection company after acquiring three Cape Town-based firms, TMT Services and Supplies, Berrydust 51 and Mobiserve.

Maswanganyi said in a separate parliamentary response earlier this month that ETC received R2.2-billion for full toll operations since the inception of e-tolls on 3 December 2013.

Action group Organisation Undoing Tax Abuse has calculated that this makes up 74% of the system’s total e-toll income, which means it was being paid to a foreign company.

Invoice printing and posting

In addition to the R225-million payment for e-tags provision, Sanral has also paid a further R327.2-million to Kapsch Sweden and Q-Free since December 2013 for invoice printing and posting for e-toll collection. These amounts are also exclusive VAT.

This brings the total amount paid to the two companies to R552.7-million.

Fin24 earlier reported that the majority of South Africa’s motorists are still not paying e-tolls. Sanral revealed that only about 30% of invoices generated to motorists who use Gauteng’s toll roads have been paid over a 24-month period.

Of the more than 1.8-billion invoices that were issued in the past 24 months, more than 1.3-billion (more than 71%) were unpaid.

As at the end of March 2016, the amount owed to e-tolls by non-registered users amounted to R7.2-billion. Sanral at the time said it could not provide the total outstanding e-toll debt, as the State-owned entity still needed to complete its financial audits.